UK Aborts Raytheon Border Control Contract

By James Boxell, Financial Times

Thursday, 22 Jul 2010 | 11:08 AM ETFinancial Times

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Raytheon has been removed from its lead role overseeing the £750m project to provide a secure border control system for the UK after the British government said it had “no confidence” in the US defense and security company.

The decision to terminate Raytheon’s contract, taken on Thursday by Theresa May, home secretary, is an early sign that the new coalition government intends to take a far tougher approach to government contractors than its Labour predecessor.

Source: Coolcaesar

Raytheon headquarters in Waltham, MA

The home secretary made the decision after examining the project alongside the new cross-government “efficiency reform group”, headed by Francis Maude at the Cabinet Office and Danny Alexander, chief secretary to the Treasury.

“The home secretary has no confidence in the prime supplier of the e-Borders contract, which since July 2009 has been in breach of contract,” Damian Green, the UK immigration minister, said on Thursday. “With critical parts of the programme already running at least 12 months late, we have taken the decision to terminate the contract.”

E-Borders is a central part of the government’s efforts to bring immigration under control and improve border security. It is aimed at storing the electronic passenger details of all people coming into the UK, which can be checked against police, security and immigration watch-lists.

The Home Office said £188m had so far been spent on the £750m contract. Officials said no penalty fee would be paid because the contract was “terminated for cause”, including late delivery of important milestones such as a National Border Targeting Centre.

Raytheon was not available for immediate comment.

Subcontractors in the Raytheon team – including Serco, Detica, Qinetiq and Accenture – are also being removed from the project, according to the Home Office. However, some companies disputed that this was the case.

The cancellation could open the way for BT , the telecoms group, to retender for the contract after it missed out on the initial bid. The Home Office said it was still fully committed to introducing the system, which is being brought in because of criticism that Britain has little knowledge of which people are entering and leaving the country, or how many.

Mr Green said: “It has been clear for some time that the way the existing programme was developing gave rise to serious concern. Over recent weeks we have been examining progress and it has been extremely disappointing. While some elements have been delivered, they have not been delivered on time. Delivery of the next critical parts of the programme are already running at least 12 months late.”

The Raytheon consortium has delivered the software for the collection and storage of passenger data in advance of travel as well as the technology to allow airlines to feed information into a central hub.